Got Solar Panels in Texas? Your Electric Plan Matters

It’s a cliché that everything is bigger in Texas, and that’s certainly true of solar energy options. For Texans interested in solar panels, there’s a complication that residents of other states don’t face: How does this affect your choice of energy plan?

One option is a solar buyback plan. These programs allow homeowners to sell their excess solar power and receive additional income or bill credits while reducing their dependence on the electric grid.

“If you buy a solar system, you should have priority access to the electricity. Any excess should be compensated through a competitive and transparent buyback program. Such a plan can be great for the consumer,” said Sachu Constantine, executive director of Vote Solar, a solar advocacy group.

While Texas offers numerous incentives and rebates for solar, there is no formal statewide net metering policy. Instead, utilities offer solar buy-back plans as an alternative way to benefit from the investment.

What is a Solar Purchase Plan?

Texas Energy Choice lets you choose your electricity provider and plan. For solar panel owners, having the option means you can choose a competitive solar buyback plan and take advantage of the extra electricity your solar panels generate.

Solar purchase plans come with additional considerations compared to standard Texas energy plans. Read the Electricity Information Label (EFL) and all plan details to maximize your return on investment. Here are the key terms to know when comparing solar purchase plans.

Solar Purchase Plan Key Dates

Key concept	Description
Contract Length	The length of an energy plan typically ranges from six to 36 months. Consider a longer contract if you secure a low import rate and a high export rate with preferred benefits.
Early Termination Fee (ETF)	If you cancel your plan before the end of your contract, you will pay a fee unless you move outside your provider’s service area. Fees vary by provider. Find the cost listed on your EFL.
Basic fee	You can pay a monthly fee regardless of your energy usage and whether it exceeds or falls below a set threshold. This fee varies depending on the energy supplier.
Transmission and Distribution Service Charges (TDU)	A fee for maintaining the power lines that bring energy to your home. TDU fees vary by utility company. For example, Oncor charges $4.23 per month plus 4.54 cents per kilowatt-hour (kWh).
Import	Cost of kWh of electricity drawn from the grid.
Export	The credit or payment you receive for selling excess solar energy to the electricity grid.

Is a solar purchase plan right for me?

Solar buy-back plans aren’t right for every solar homeowner. Consider the following to determine the best option for you.

The value of solar energy

The export value determines how much you earn from your excess solar energy. Higher export rates mean more credits or payments, but the value of your contribution goes beyond the export rate.

“Solar owners provide more services than just energy. Inverters, batteries or other system components provide voltage control, peak load management, frequency regulation and a range of services that utilities typically pay for,” Constantine said. “As a solar owner, you are now contributing to these services. It’s important not to settle for very low wholesale prices that benefit utilities more than you.”

Solar Buy-Back Plan Details

Not all plans are created equal. The details and limitations will vary by provider. Some providers allow unlimited credits with no cap or expiration date, while others have an expiration date. Export rates also vary. Some providers pay retail wholesale prices, while others have a set rate.

Consider your energy usage to find the best plan. If you prefer more flexibility in how you use your credit, choose a plan that has no expiration dates. If you use energy at night, a plan with free nights may be a better option. Read the details to fully understand the benefits of each plan and make an informed choice.

Cost of solar panels and electricity bills

One of the main incentives for installing solar panels at home is to reduce the cost of your electricity bill. Solar energy is an expensive investment. The export rate should fairly cover your grid contributions and reduce your energy bills to maximize your return.

Constantine said: “Solar panels are good for at least 20 to 25 years. You know how much your system will produce and you get a certain amount of money for the energy. The buyback program should at least offset the cost of buying and producing solar.”

Electric energy usage

Solar buy-back plans aren’t worth the hassle for every solar owner, depending on how much energy you use. Traditional energy plans may be more cost-effective for owners with high energy usage and solar batteries.

“If they’re like me and they know they can take all the solar energy and put it into a battery or an electric vehicle, traditional energy rates might be more cost-effective. The reason you’re looking at buying back is because you have a big roof and there are times of the year when you lose a lot of energy, so you want your solar system to be able to handle that. But there are other times of the year or during the day when that’s just too much capacity,” Constantine said.

“If you don’t use all of your energy, solar buyback plans are an easy way to resell it. If you don’t own an electric vehicle or don’t have a battery and the price of a traditional plan is better, choose a traditional plan.”

Contribution to sustainable development

By contributing clean energy to the grid, you support Texas’ clean energy initiatives to reduce the amount of fossil fuels used to generate electricity. Contributing to a more sustainable environment has more emotional value than financial value.

“There’s an individual focus. The belief that you’re doing something for the climate and resilience to a clean grid future. You can’t really monetize how good you feel about doing something for the planet,” Constantine said.

Why does my electricity plan matter if I have solar panels?

If you don’t want an off-grid solar system, you’re still connected to the grid. Although your dependency is much lower, you may still need help from time to time. Staying connected provides power during periods of low sunlight or when your home needs more energy than your solar panels are producing.

When that happens, you need an energy plan to keep the electricity flowing. Your energy choice determines how you use the electricity from the grid—whether you sell the energy back, store it in solar panels, or rely on the grid as a backup power source. Choosing an energy plan complements your solar panel system, keeping the electricity flowing into your home.

Texas Net Settlement Rules

Net billing gives homeowners credits for excess solar energy at market rates, which can offset future utility bills. Some companies offer full retail credits for excess energy, while others may offer lower rates or no net billing at all. Texas does not have a standard statewide net billing policy, so options vary by provider.

While the options are similar, solar buyback plans are different from net metering. With a solar buyback plan, you can sell your excess energy to utilities, potentially receiving direct payments or credits on your bills. Suppliers compete with each other to offer favorable import and export rates, allowing homeowners to choose the best plan.

If you have solar panels installed on your home and choose a traditional Texas energy plan, you can opt to participate in net billing. If you don’t want to sell your excess energy, consider solar batteries to store energy. Batteries allow you to store excess electricity generated during the day for use at night or during periods of low solar production, supporting energy independence.

How to Buy an Electric Plan in Texas

With so many energy plan options in Texas, choosing a plan can be difficult. Many sites, like SaveOnEnergy and ChooseEnergy (both of which, like CNET, are owned by Red Ventures), make it easy by helping you search, compare and sign up for Texas electricity. You can also use the state’s comparison tool, Power to Choose.

Start by entering your postcode on one of the sites listed. You’ll be presented with a long list of energy plans for your area. Filter and sort available plans based on contract length, providers, renewable energy content, and other preferences.

Once you find a plan that fits your budget and energy needs, check EFL to learn all the plan details to understand the benefits. Look out for any hidden fees, such as an early termination fee or certain transmission and distribution fees.

Depending on the benefits, the lowest rate of an option may not be the cheapest price overall, so reading the fine print is important to determine the best option for you. For example, energy plans with a utility bill credit may result in a lower rate after the credit is applied, but the initial rate may seem higher.

Whether you choose a solar buyback or a traditional energy plan, investing in solar supports financial savings and energy independence, and contributes to a more sustainable future. Consider your electricity usage and make sure your energy plan is right for you. Evaluate the details, including contract length, export rates, and any fees, to get the most out of your solar investment.